Remittance giant Western Union struck a deal with operator Saudi Telecom Company (STC) to buy a 15 per cent stake in its mobile payment platform for $200 million.
The deal, which is subject to regulatory approval, will see Western Union become the only other stakeholder in STC Pay, with its operator parent company retaining the remainder.
Alongside the investment, the two inked an expanded commercial agreement for international money transfer services.
STC Pay provides a range of digital payments including international remittances and retail payments through a mobile app, with various links to the Saudi operator’s core communications operation.
In its statement on the proposed transaction, STC said the cash would be used to support long-term expansion plans for the unit.
STC CEO Nasser Al Nasser added: “As a digital enabler and a pioneer in the digital transformation, we aspire to play a vital role in the vision of the Saudi Arabian Monetary Authority in many initiatives that support creativity and developing the financial services, as fintech is a pillar of STC strategy.”
The company claims the service is the largest digital wallet in the MENA region with more than 4.5 million users.
Western Union’s investment is expected to close in Q1 2021.